Feds Up AIG Aid to $150B; Insurer Posts $24.5B Loss

US scraps insurer's original $123 billion package as company's struggles continue
By Jim O'Neill,  Newser User
Posted Nov 10, 2008 5:22 AM CST
The logo of troubled sponsor, American International Group Inc., AIG, is seen on the shirts of Manchester United's players during their UEFA Champions League group E soccer match.   (AP Photo/Jon Super)
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(Newser) – The $123 billion the US pledged to foundering insurance giant AIG will grow to at least $150 billion, reports the Wall Street Journal, as the company continues to hemorrhage money. AIG, which today reported a loss of $24.5 billion in its most recent quarter, will get more cash and lower rates; the federal government will get a $40 billion stake.

The new deal, reached last night, indicates the original package didn’t go far enough to right AIG, decimated by the collapse of the subprime mortgage market. The move likely will raise the ire of congressional Democrats, who have been pushing for the Treasury Department to provide billions of dollars to aid the Big Three automakers.